LLB Law
Business Entities
LAW09130
2020/2021
Memorandum to Partner in Law
Firm
Word Count: 2,200
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, Business Entities Coursework Question 2020-21
Penman Finance Partnership, (referred to as ‘the firm’) based in Dunfermline, provides a full range of
business, property and financial services to small businesses in Fife, Scotland. Bob is a partner in the
firm.
In April 2019, Bob was instructed by Grubbs Ltd, clients of the firm, to sell three of Grubbs’ bakery
shops in Fife quickly to avoid Grubb Ltd becoming insolvent. Bob sent details of the three properties
to Nosh Ltd. Nosh Ltd is another client of the firm and a local competitor of Grubbs Ltd. Nosh Ltd told
Bob that it would buy Grubb Ltd.’s three bakery shops on the condition that Bob was able to find a
new buyer or buyers for two out of the three properties. If Bob found a buyer for Nosh Ltd, Nosh Ltd
would pay Bob £20,000 to Bob’s personal bank account. On the same day that Nosh Ltd bought the
three shops, two of the shops were sold to Glossies Ltd, a nail bar company and client of the firm. Bob
received payment of £20,000 into his personal bank account from Nosh Ltd and was very pleased.
In June 2019, Bob received £50,000 from Watsons Ltd, a restaurant business, to invest in a 90-day
high interest bank account for Watsons Ltd. However, Bob only invested half of the money. Bob spent
the rest of the money on a group golf membership at Carnoustie Golf Club for all the firm’s partners,
a limited-edition oil painting of St Andrews golf course which he hung inside the entrance to the
firm’s offices, and a set of golf clubs which other partners of the firm frequently used. The partners
were unaware that client’s money had financed these purchases.
In his spare time, Bob volunteered his accounting services to Furry Friends, a local animal charity.
Unfortunately, there were significant accounting errors in paperwork Bob submitted on Furry Friends’
behalf to the Charity Regulator. Furry Friends contacted Jean, Bob’s wife and managing partner of
Penman Partnership with their concerns. Jean said there was nothing the partnership could do to
help.
Using partnership funds, Bob decided to treat himself to a brand-new Range Rover car and a weekend
golf and spa break in Dunkeld, Perthshire for all the firm’s partners and their spouses. During that
weekend break, Bob played golf with his partners and their spouses. Despite the calm weather, Bob
struck a golf ball too quickly which veered off and hit another player on the golf course causing her
significant injury. Over dinner Bob drank too many single malt whiskies and matters got out of hand.
Bob and Victor, another partner of the firm, had a heated discussion about Scottish football which
ended in Victor sustaining a head injury, a smashed iPad which belonged to Frasia, Victor’s wife, and
damage to tables and chairs in the hotel’s cocktail bar. As a result of all these recent events, the other
partners send Bob an email asking him to attend a meeting and threatening that Bob would likely be
expelled from Penman Finance Partnership.
Advise Bob regarding all of the matters above including the firm’s email threatening Bob’s expulsion
from Penman Partnership.
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